By Bharath Rajeswaran
BENGALURU (Reuters) -Indian shares erased intraday losses on Thursday, boosted by financials and Tata Motors, after the central bank stood pat on interest rates as expected.
The NSE Nifty 50 index was up 0.07% at 24,314.9, as of 12:41 p.m IST, and the S&P BSE Sensex added 0.08% to 79,525.96. The indexes had slipped as much as 0.6% immediately after the monetary policy announcement.
The Reserve Bank of India kept rates unchanged for a ninth straight meeting, with Governor Shaktikanta Das warning against complacency because of falling core inflation.
The RBI has kept interest rates unchanged since February 2023. The Nifty 50 index has surged about 36% in this period, helped by strong economic growth, corporate earnings and surplus liquidity. However, equity benchmarks have succumbed to bouts of profit-taking as they trade near record highs.
“Though India’s position today is far more resilient on economic front than other countries which could have allowed a slight rate reduction to test the water on inflation, the RBI has taken a safer bet,” Umeshkumar Mehta, chief investment officer at SAMCO Mutual Fund said.
The commentary on inflation was slightly more hawkish than expected but the retention of growth and inflation forecast shows the economy remains in fine fettle, analysts said.
Financials-linked indexes rose, with financial services up 0.3% and banks gaining 0.2%.
HDFC Bank, the heaviest weighted stock on the Nifty 50, rose 1.7%, after several brokerages said the private lender had an edge in terms of retail asset quality.
The RBI cautioned banks against high growth in certain segments of retail loans, urging them to monitor the quality of the loans to avoid systemic risks.
Tata Motors gained 2.4% on hopes its new car ‘Curvv.ev’ would boost market share.
Seven of the 13 major sectors logged losses, with IT, energy and metals down about 0.6%.
(Reporting by Bharath Rajeswaran in Bengaluru; Editing by Sherry Jacob-Phillips, Janane Venkatraman, Savio D’Souza and Mrigank Dhaniwala)
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